- with Inhouse Counsel
- with readers working within the Automotive, Technology and Oil & Gas industries
Welcome to the March edition of the Dentons Link Legal Corporate Legal Developments Newsletter . This issue highlights key updates from the Ministry of Corporate Affairs and the Reserve Bank of India, focusing on corporate governance reforms and changes to India’s foreign exchange regulatory framework.
It covers MCA initiatives to ease compliance and RBI’s new FEMA regulations on guarantees, trade, and external borrowings, reflecting a shift towards simplified, principle-based regulation.
This March newsletter covers categories of relevant updates notified by the Ministry of Corporate Affairs (“MCA”) and the Reserve Bank of India (“RBI”) for the month of January and February updates.
MCA
Ministry of Corporate Affairs (“MCA”) has invited comments on the draft rules on the refund process from the Investor Education and Protection Authority (“IEPF Authority”)
January 28, 2026: The MCA, vide File No. IEPFA-15/1/2023 has published a notice inviting comments from various stakeholders on the draft rules for refund process from the IEPF Authority. Comments may be suggested till February 27, 2026.
The Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 were notified keeping in view the facilitation of refund of claims in respect of shares, unclaimed dividends, debentures etc. The amendment has been proposed with the purpose of easing the process of refund, by exploring that the process of claim and refund be done based upon the verification of respective companies. Some of the key proposed changes are as follows:
- Statement to be furnished to the Investor Education and Protection Fund (“Fund”): Complete omission of rules 5 (6)(a) and 5 (6)(b) is proposed, as the deposit of amount to the fund has been linked directly to Bharatkosh. Hence, there shall be no designated bank and as all receipts are directly credited to Bhartakosh and reconciled through Public Financial Management System. Earlier, the Fund was required to reconcile the amount remitted and collected with a designated bank on a monthly basis;
- Refund to claimants from Fund: The first proviso of rule 7(2), which discusses the submission of Form IEPF-5 (Application to the Authority for claiming unpaid amounts and shares out of Investor Education and Protection Fund), is proposed to be replaced, and the MCA has cited procedural clarity in light of the two-step filing of Form IEPF-5;
- Refund to claimants from Fund: The substitution of existing rule 7(3), which contains the actions of the company post the receipt of claim is proposed to be made. Earlier, the time limit for filing the Electronic Verification Report (EVR) was 30 (thirty) days, which has been extended to 45 (forty-five) days. The rationale provided is that as the company is solely responsible for verifying the claimant's identity and assessing their entitlement to the shares, a reasonable timeframe is necessary for due diligence, document review, and accurate evaluation. The amendment also proposes to insert a new rule 7(3A), to ensure uniform and streamlined handling of cases involving corporate benefits such as bonus shares, stock splits and related corporate actions.
- Reduction in time for disposing claims: The timeline for refund of a claim by the IEPF Authority under rule 7(6) has been reduced from 60 (sixty) to 30 (thirty) days, which has been proposed for low value cases to facilitate expeditious resolution of such claims; and
- Insertion of Rule 7A: The change proposes to insert a new rule 7A, which contains the appeal mechanism in case of rejection of a claim. The proposed change lays down a formal appeal mechanism for aggrieved investors to protect their interests in cases of erroneous claim rejection.
Ministry of Corporate Affairs (“MCA”) has appointed new registrars of companies (“RoCs”)
February 10, 2026: Effective from February 16, 2026, vide Notification S.O. 698(E), the MCA has, in supersession of previous notifications issued in this regard, laid out the list of the new RoCs along with their jurisdiction. The notification has been issued in exercise of the powers conferred by section 454 (Adjudication of penalties) of the Companies Act, 2013 read with the Companies (Adjudication of Penalties) Rules, 2014.
The aforementioned notification clarifies that any appeals filed against the orders passed by the adjudicating officers will lie before the concerned Regional Director having jurisdiction over the adjudicating offices as provided in the notification numbers S.O. 4852(E), dated October 23, 2025.
Further, proceedings pending before the adjudicating officers, and appeals pending before the Regional Directors as on February 16, 2026, shall be dealt with in accordance with this notification
Ministry of Corporate Affairs (“MCA”) has amended earlier notification conferring powers to Regional Directors under sections 2(41) and 14(1) of the Companies Act, 2013 (“Act”)
February 10, 2026: Effective from February 16, 2026, vide Notification S.O. 708(E), the MCA has amended previous notification number S.O. 6225 (E) dated December 18, 2018.
The earlier notification delegated certain powers with respect to the first proviso to section 2(41) (regarding change in financial year) of the Act and the second proviso to section 14(1) of the Act (regarding alteration of articles of a company), subject to the condition that the Central Government may revoke such delegation of powers or may itself exercise the powers under the said sub-section, if in its opinion such a course of action is necessary in the public interest.
Now, the powers have been delegated to the Regional Directors at Ahmedabad, Bangalore, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Navi Mumbai, and New Delhi instead of Regional Directors at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad, and Shillong.
Ministry of Corporate Affairs (“MCA”) has amended earlier notification conferring certain powers to Regional Directors under sections 153 and 154 of the Companies Act, 2013 (“Act”)
February 10, 2026: Effective from February 16, 2026, vide Notification S.O. 700(E), the MCA has amended previous notification number S.O. 1354 (E) dated May 21, 2014.
The earlier notification delegated the Central Government’s powers and functions in respect of allotment of Director Identification Number under Sections 153 and 154 of the Act to the Regional Director, Joint Director, Deputy Director or Assistant Director posted in the office of Regional Director at Noida. Now, the bold portion is replaced by “Regional Director, Northern Region Directorate I, Headquarter at New Delhi”.
Ministry of Corporate Affairs (“MCA”) has amended earlier notification conferring powers to Regional Directors under section 94(5) of the Companies Act, 2013 (“Act”)
February 10, 2026: Effective from February 16, 2026, vide Notification S.O. 699(E), the MCA has amended previous notification number S.O. 891 (E) dated March 31, 2015.
The earlier notification delegated the Central Government’s powers and functions under section 94(5) (regarding place of keeping and Inspection of Registers, returns, etc.) of the Companies Act, 2013 to the Regional Directors at Mumbai, Kolkata, Chennai, Noida, Ahmedabad, Hyderabad, and Shillong.
Now, the powers have been delegated to the Regional Directors at Ahmedabad, Bangalore, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Navi Mumbai, and New Delhi instead.
Ministry of Corporate Affairs (“MCA”) has amended earlier notification conferring powers to Regional Directors under section 208 of the Companies Act, 2013 (“Act”)
February 10, 2026: Effective from February 16, 2026, vide Notification S.O. 701(E), the MCA has amended previous notification number S.O. 3557 (E) dated December 31, 2015.
The earlier notification delegated to the Regional Directors at Mumbai, Kolkata, Chennai, Delhi, Ahmedabad, Hyderabad and Shillong, the Central Government’s power under section 208 of the Act for receiving the report from the Registrar (having jurisdiction over the place of registered office of the company concerned) or from the Inspector where such report recommends action for violation of offences under the Act for which imprisonment of less than 2 (two) years is provided, (except for violation of offences under Chapter III, IV, section 127, 177 and 178 for which the report shall be received by the Central Government), subject to certain prescribed conditions.
Now, the powers are delegated to the Regional Directors at Ahmedabad, Bangalore, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Navi Mumbai, and New Delhi.
Ministry of Corporate Affairs (“MCA”) has amended earlier notification conferring powers to Regional Directors under section 66(2) of the Companies Act, 2013 (“Act”)
February 10, 2026: Effective from February 16, 2026, vide Notification S.O. 707(E), the MCA has amended previous notification number S.O. 2938 (E) dated September 6, 2017.
The earlier notification delegated the Central Government’s powers and functions under section 66(2) (regarding reduction of share capital) of the Act to the Regional Directors at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad and Shillong, Now, the powers have been delegated to the Regional Directors at Ahmedabad, Bangalore, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Navi Mumbai, and New Delhi.
Ministry of Corporate Affairs (“MCA”) has amended earlier notification conferring powers to Regional Directors under certain sections of the Companies Act, 2013 (“Act”)
February 10, 2026: Effective from February 16, 2026, vide Notification S.O. 709(E), the MCA has amended previous notification number S.O. 4090 (E) dated December 19, 2016.
The earlier notification delegated the Central Government’s powers and functions under certain sections of the Act to the Regional Directors at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad and Shillong. Now, these powers are delegated to the Regional Directors at Ahmedabad, Bangalore, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Navi Mumbai, and New Delhi.
Powers have been delegated for the following sections of the Companies Act, 2013:
- section 8(4)(i) (for alteration of memorandum in case of conversion into another kind of company);
- section 8(6) (regarding formation of companies with charitable objects, etc.);
- section 13(4) and section 13(5) (regarding alteration of memorandum);
- section 16 (regarding rectification of name of company);
- section 87 (regarding rectification by Central Government in register of charges);
- section 111(3) (regarding circulation of members’ resolution)
- section 140(1) (regarding removal, resignation of auditor and giving of special notice);
- section 230(5) (regarding power to compromise or make arrangements with creditors and members);
- sub-sections (2), (3), (4), (5) and (6) of section 233 (regarding merger or amalgamation of certain companies);
- first and second proviso of section 272(3) (regarding petition for winding up);
- section 348(1) (regarding information as to pending liquidations);
- sections 361 (regarding summary procedure for liquidation), 362 (regarding sale of assets and recovery of debts due to company), 364 (regarding appeal by creditor) and 365 (regarding order of dissolution of company);
- clause (i) of the proviso to sub-section (1) of section 399 (regarding inspection, production and evidence of documents kept by registrar); and
- section 442 (regarding mediation and conciliation panel).
Ministry of Corporate Affairs (“MCA”) has invited suggestions/comments on such draft amendment from stakeholders on amendment of the Companies (Registered Valuers and Valuation) Rules, 2017 (“2017 Rules”)
February 2, 2026: Vide public notice number 1/27/2013-CL-V(P), the MCA has invited suggestions on rule 12(1)(i) of the 2017 Rules.
The public notice has been published in light of suggestions being received by the MCA, for prescribing a minimum paid-up share capital criterion for recognition of Registered Valuers Organisations (“RVOs”). The current rule, while providing for the eligibility criteria for recognition of RVOs, does not specify any minimum share capital criteria for recognition as an RVO. The amendment proposes the same to be INR 25,00,000 (Indian Rupees Twenty-Five Lakh only).
Suggestions/comments on the draft amendment with justification are invited latest by March 5, 2026, through e-Consultation Module on the website of the MCA.
Ministry of Corporate Affairs (“MCA”) has launched the Companies Compliance Facilitation Scheme, 2026 (CCFS-2026)
February 24, 2026: Vide General Circular No. 01/2026, in light of the MCA’s initiatives to provide ease of doing business to corporates, the MCA has launched a one-time scheme, to allow companies to file their documents related to Annual Return and Financial Statements in the MCA-21 registry, or to file for dormancy/closure. Through this scheme, the MCA shall condone delays in filing the aforementioned documents with the Registrars of Companies (“RoCs”).
All companies except the following companies are permitted to avail the scheme:
- companies against which action of final notice for striking off the name u/s 248 of the Act (previously section 560 of Companies Act, 1956) has already been initiated by the Registrar;
- companies which have filed application for striking off their name from the register of companies;
- companies which have filed for obtaining Dormant Status under section 455 of the Act before the inception of this Scheme;
- companies which have been dissolved pursuant to a scheme of amalgamation under the Act; and
- vanishing companies.
The scheme shall come into force on April 15, 2026, and shall remain in force till July 15, 2026. After the conclusion of the scheme, the RoCs have been directed to take necessary action as per the Companies Act, 2013, against the companies who have not availed the scheme and are in default of filing the documents in a timely manner.
RBI
Reserve Bank of India (“RBI”) has notified the Foreign Exchange Management (Guarantees) Regulations 2026
January 6, 2026: Vide Notification No. FEMA 8(R)/2026-RB, the RBI has notified the Foreign Exchange Management (Guarantees) Regulations, 2026 ("Guarantees Regulations 2026"), superseding the Foreign Exchange Management (Guarantees) Regulations, 2000, ("Guarantees Regulations 2000"). Further, vide circular no. RBI/2025-26/192, A.P. (DIR Series) Circular No. 19, the RBI has directed all authorised dealer category I banks to be guided by the Guarantees Regulations 2026 while facilitating a guarantee wherein any of the parties is a person resident outside India.
The Guarantees Regulations 2026 marks a major shift from the previously approval driven regime to a principle based framework for cross border guarantees. Under the new regulations, guarantees, including counter guarantees are generally permitted without prior RBI approval, provided the underlying transaction is not prohibited under Foreign Exchange Management Act, 1999 (“FEMA”), and the parties meet borrowing and lending eligibility norms. This expanded automatic route aims to enhance ease of doing business while ensuring stronger regulatory clarity through broader definitions and widened scope.
A key compliance enhancement is the introduction of Form GRN, mandating comprehensive reporting of all guarantees issued, modified, or invoked, thereby improving transparency across the lifecycle of guarantee transactions. The issuance of these regulations has also resulted in the supersession of several legacy A.P. (DIR Series) circulars, discontinuation of quarterly trade credit guarantee reporting from March 2026, and consequential amendments to multiple FEMA Master Directions (such as Master Direction - External Commercial Borrowings, Trade Credits and Structured Obligations; Master Directions - Export of Goods and Services; Master Directions - Import of Goods and Services; Master Direction - Other Remittance Facilities; and Master Direction - Reporting under Foreign Exchange Management Act, 1999). Collectively, these reforms consolidate a previously fragmented framework and align India’s cross border guarantee ecosystem with contemporary regulatory expectations
Reserve Bank of India (“RBI”) has notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026
January 13, 2026: Vide Notification No. FEMA 23R/2026-RB, the RBI has notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (“Export and Import Regulations”), superseding the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015. Vide Circular No. RBI/2025-26/194, A.P. (DIR Series) Circular No. 20, the RBI has issued directions to all authorized dealers bank in relation to Export and Import Regulations.
Export and Import Regulations establishes a unified and principle‑based framework governing both exports and imports. Effective 1 October 2026, the new regulations supersede the earlier 2015 export‑only regulations and consolidate compliance under a single regime. A notable change is the clearer categorization of specified authorities for goods, services, and software across Domestic Tariff Area (DTA) and Special Economic Zone (SEZ) jurisdictions, along with revised rules for Export Declaration Forms (“EDF”). Exporters of goods must now furnish the EDF at the time of shipment (deemed filed at Electronic Data Interchange (EDI) ports), while service exporters must submit a monthly EDF within 30 (thirty) days of invoicing, discontinuing previous waivers and streamlining documentation across sectors.
Export and Import Regulations also strengthens transaction monitoring and operational efficiency by mandating lifecycle‑based closure of entries in Export Data Processing and Monitoring System (EDPMS) and Import Data Processing and Monitoring System (IDPMS), permitting simplified closures for entries up to INR 10,00,000 (Indian Rupees Ten Lakh only) based on self‑declarations. Export realization timelines have been standardized to 15 (fifteen) months for goods and services, extendable to 18 (eighteen) months where invoicing or settlement occurs in INR, with authorized dealer banks empowered to grant extensions, permit reductions in realization, set‑offs against import payables, and allow third‑party payments. Authorized dealer banks have been instructed to send all references to the RBI through the PRAVAAH portal and report any doubtful transaction to the Directorate of Enforcement. The overarching shift aims to enhance ease of doing business, provide greater flexibility to authorized dealer banks, and modernize India’s trade compliance ecosystem while maintaining robust regulatory oversight.
Reserve Bank of India (“RBI”) has notified the Foreign Exchange Management (Borrowing and Lending) (First Amendment) Regulations 2026
February 9, 2026: Vide Notification No. FEMA 3(R)(5)/2026-RB, the RBI has notified the Foreign Exchange Management (Borrowing and Lending) (First Amendment) Regulations, 2026 (“Amended Regulations”), to amend the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 (“Principal Regulations”). The Amended Regulations significantly overhaul India’s External Commercial Borrowing (“ECB”) framework by expanding the eligible borrower base to include all entities incorporated or registered in India (beyond earlier limited categories), and liberalizing the definition of recognized lenders, removing FATF/IOSCO jurisdiction restrictions and permitting lending by any person resident outside India, foreign branches of RBI regulated entities, and IFSC based financial institutions. It raises borrowing limits to the higher of USD 1 billion or 300% of net worth, introduces market aligned benchmark-based pricing in place of earlier cost ceilings, and codifies detailed end use restrictions through a new Regulation 3A, prohibiting use for activities such as chit funds, certain real estate transactions, capital market speculation, and refinancing of restricted domestic loans. The amendment also streamlines reporting norms (via Forms ECB 1 and ECB 2), strengthens monitoring (including provisions for “untraceable borrowers”), and consolidates previously scattered ECB rules into a single, principle-based framework.
Vide the Amended Regulations, the RBI has introduced the following key changes:
- Substitution of Regulation 2 (Definitions): The Amended Regulations provide definitions for several key terms, including arm’s length basis, benchmark rate, cost of borrowing, control, industrial park, real estate business. Notably, the definition of infrastructure sector now explicitly deems Exploration, Mining and Refinery sectors as part of the infrastructure sector for these regulations.
- Insertion of Regulation 3A (Restriction on end-use of borrowed funds): A new regulation has been inserted to restrict the use of borrowed funds for specific activities in India, including Chit funds, Nidhi Companies, Trading in Transferrable Development Rights (“TDR”), and Real estate business (subject to specific exemptions for industrial parks and construction-development projects) Agricultural and animal husbandry (subject to specific exemption for floriculture, horticulture and cultivation of vegetables and mushrooms, development and production of seeds services related to agro and allied sectors etc). Borrowing for transacting in securities is generally prohibited except for strategic corporate actions like mergers or acquisitions.
- Amendment to Regulation 6(B) (Amendment to Individual INR Borrowing): Resident individuals may now borrow in INR from an NRI or a relative who is an OCI cardholder. Such loans must be received via inward remittance or debit to NRE/NRO/FCNR(B)/SNRR accounts and must be on a non-repatriation basis. Further, LLPs and partnership firms can now raise ECB subject to the regulations, ECBs can now be availed in in any foreign currency & INR.
- Revised Schedule I (ECB Framework):
- Borrowing Limit: Eligible borrowers can raise ECB up to USD 1 billion or 300% of their net worth, whichever is higher. This limit does not apply to borrowers regulated by financial sector regulators.
- Maturity: The minimum average maturity period is three years. However, manufacturing sector entities may raise up to USD 150 million with a minimum average maturity period (“MAMP”) between one and three years.
- MAMP Waiver: MAMP waivers are allowed without RBI approval in case of corporate actions like merger, demerger and acquisition of control and amalgamation. Further, ECBs can be utilized for corporate actions like mergers, demergers and acquisition of control and amalgamation.
- Security: ECBs can be secured by charges on immovable, movable, financial, or intangible assets. However, entities regulated by the RBI are prohibited from issuing any type of guarantee.
- Reporting Requirements: Borrowers must obtain a Loan Registration Number (“LRN”) via Form ECB 1 before any drawdown. Subsequent changes must be reported in Revised Form ECB 1, and all actual transactions must be reported in Form ECB 2 within 7 (seven) calendar days from the end of the month. Earlier the Form ECB 2 was required to be filed every month but now it has been made an event-based form.
- Applicability: External Commercial Borrowings for which a Loan Registration Number (LRN) has been obtained before these Amended Regulations coming into effect shall continue in compliance with the then applicable regulations, except reporting which shall be undertaken as per the amended regulations.
The Amended Regulations have been enacted from February 16, 2026.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]
